The guide for interviewing the Chief Financial Officer. A complete overview of the areas that should be looked at during an initial interview of the CFO position.

1. Organizational fit LEADERSHIP Vision & Value Financial Strategy
is generally assessed 1 in 5 ceos of $2 billion The raison d’être of the an approach that delivers
during the small talk at plus companies come CFO is to use his financial a sustained competitive
the beginning and end of from 1 of 20... PAGE 9 prowess to create value... advantage for a company
an interview... PAGE 6 PAGE 12 or an individual... PAGE 14
ASSESSING THE
An Interview Guide | a whItepaper by shane phillips

2. contents
ASSESSING THE CONTROLS
CHIEF FINANCIAL OFFICER TO REDUCE THE COMPANY’S
3 who could become the chief
architect of your company’s
16 EXPOSURE TO IDENTIFIED RISKS
growth trends
Organizational fit MITIGATING RISKS
A Risk can be defined as
6 is generally assessed during
the small talk at the beginning 17 any event that threatens
the achievement of the
and end of an interview
business objectives…
LEADERSHIP REDUCING COSTS
9 1 in 5 ceos of $2 billion plus
companies come from 1 of 20
18 BY EMBRACING TECHNOLOGY
AND BECOMING INNOVATIVE
AGENTS OF CHANGE.
Vision & Value resource
allocation
12 The raison d’être of the CFO is
to use his financial prowess to 19 to strike a balance
create value. between current and
future investiments
Financial Strategy
an approach that delivers
14 a sustained competitive
advantage for a company
or an individual.
shane phillips consultants
+971 50 940 7537 | shane@shanephillips.net | www.shanephillips.net

3. Assessing the
Chief Financial Officer
An Interview Guide
A
fter interviewing 250 totaling more than $1.5 billion between 1972 to
Chief Financial Officers, 1987. Their share price skyrocketed from $25 a share
I thought it was interesting that in 1980 to $500 a share in 1987, increasing the
only 8% passed their initial company’s value by 20 times in less than seven years.
assessment for the position. One Take a moment and imagine your own personal net
CFO even balked at me when I worth, and then imagine growing that value by 20
asked him to describe his vision for the financial times to get a feeling for what Saatchi & Saatchi
agenda of his company. He continued to explain accomplished. The company simply experienced
that creating a vision was not the job of the CFO, white knuckle explosive growth during this time
that his job was to play a supporting role. He told period.
me the vision should come from the Chief
Executive Officer. Needless to say he was The architect of this growth was not one of the
disqualified. creative visionaries the firm was so renowned for
employing but rather their Financial Director, who
I would contest that the CFO is a visionary and often was none other than Sir Martin Sorrell. From 1975
a critical value creator in a company. Take for to 1984, Sorrell was busy perfecting his CFO skills
example a small advertising boutique formed in 1967 and became a master of the “Earn Out” acquisition
called CramerSaatchi. CramerSaatchi grew to strategy. Not too long after he left Saatchi &
3 become one of the largest advertising agencies in the
world and is most notably recognized as Saatchi &
Saatchi their share price dropped by 98%, while
Sorrell went on to build the world’s largest
Saatchi. Saatchi & Saatchi executed 35 acquisitions advertising firm, WPP Group.
500
US DOLLARS
450
400
350
300
250
200
150
100
50
1980 1982 1982 1983 1984 1985 1986 1987 0
PRICE CHANGE ON SAATCHI & SAATCHI STOCK

4. Mark Loughbridge, CFO of IBM, takes the
podium and becomes the world’s number
one CFO for 2012
- The Wall Street Journal
For a more recent example of a leading Chief not have and if they cannot give direction to their
Financial Officer one can look at Mr. Mark own careers, they will not be able to give direction
Loughridge, Chief Financial Officer of IBM. Mark to a large and complex team of executives.
took over as CFO in 2004 and has played a heavy
hand in defining the company as it divested its PC Top performers begin with a vision; they exude a
4 business. Loughridge has developed the company’s
plans as it relates to how to grow profit and earnings
sense of direction, and are meticulous in their
execution. While the skill sets of a CFO may vary
per share as well as how to invest its cash. He has depending on the needs of an organization there
championed more than 80 acquisitions and is one of are a few universal threads which all top
the key architects of IBMs vision for 2015. His total performing CFOs must share; vision is one
compensation for 2011 was $8 million while his of them.
company, IBM, surpassed $100 billion in revenue last
year. Mark Loughridge possesses a potent mix of This assessment of a CFO looks at 8 critical
financial and strategic skill sets and to many he is areas and is designed only as the beginning of
the living definition of the modern day Chief an exhaustive selection process. There are
Financial Officer. several areas I left out such as organizationa
impact and the ability of the CFO to create
An executive cannot transmit something they do not
have and if they cannot give direction to their own
careers, they will not be able to give direction to a
large and complex team of executives.
As we can see with the examples above that top consensus with the Board or their ability to
performing CFOs are visionaries, they are strategic influence power players of which they have no
leaders who take initiative and are critical impact authority over.
players who help define the face of an
organization. In any executive assessment, This assessment is generic and a proper
especially in a CXO assessment, the individual in selection process should always be bespoke
question must have vision and a sense of direction.
An executive cannot transmit something they do

5. The 8 critical areas this assessment looks at are: the Six Point Selection process or an equivalent
process as described in the following pages.While
there are many more relevant areas to look at
Organizational Fit
when assessing a CFO, such as Tax Strategy,
Financial Analysis, Funding, Capital Structuring
and others, I have chosen 8 to start with. These 8
were chosen as a beginning not an ending.
ip
Re loc
I start with organizational fit as one begins to
sh
Al
so ati
er
ur on
ad assess fit during the small talk at the beginning of
ce
Le
8 1 2
s
a meeting. I chose to assess Leadership next as I
have argued at the beginning of this paper the CFO
Vision & Creating is a critical leadership role. As the title suggests, it
st /
7 3 Shareholder Value starts with Chief, it is not Financial Chief Officer it
Co
uc ing iency
c 6 4 is Chief Financial Officer, and thus the emphasis is
Red g Effi
asi
n 5 on leadership ability first and financial acumen
Fi trat
second. I then move onto Vision & Creating
Ri ing
e
na eg
ncr
S
s
I
t
nc y
Shareholder Value, which can be seen as the
sk
ga
Controls
ia
iti
l
paramount duty of the CFO. Then the rest of the
M
competencies are explored in detail.
To be clear it is not important where one starts the
assessment. It is important to be thorough and
and tailor made by the hand of a master the initial interview should take approximately
5 craftsman to meet the needs of the
organization.
two hours. That is 8 sections with 15 minutes
spent on each.
For example if a company is under duress and A full selection process should entail several
requires to be restructured, it will require a stages as described in the Six Point Selection
very different CFO than a company which is process below;
delivering record profits and is preparing for 1. Behavioral Interview
an Initial Public Offering. As well a company 2. Chronological Interview
that is looking to grow organically will require
3. Technical Interview
a much different CFO than a company that is
looking to grow through acquisition. So 4. Case Study
before any candidate assessment can be made, 5. Psychometric Testing
first an assessment of the company must be 6. References
As the title suggests it starts with Chief, it is not Financial
Chief Officer it is Chief Financial Officer, and thus the
emphasis is on leadership ability first and financial
acumen second.
completed. A deep understanding of the One cannot over estimate the impact a CFO has
vision and direction of the company must be on an organization and thus organizations are
developed as only then can a CFO who is a fit encouraged to invest in a regimented, thorough
be found. and exhaustive assessment of their CFO
candidates. I will not go into an explanation of
This assessment guide is designed to be a generic the Six Point Selection process described above as
suggested starting point and a blunt initial first I do not have space in this paper to do so, instead
pass as part of a much larger and regimented I will focus on the initial interview. n
selection process. It should allow you to identify
your top ten candidates; however your top
candidates, once selected should be exposed to

6. organizational fit
O
rganizational fit is STATISTICS OF A
generally assessed during the
small talk at the beginning TOP PERFORMER
and end of an interview. CXO
executives often use a gut check
of whether or not they would like
working with this individual and whether or not he
would be a successful addition to the team.
This accepted small talk phase of the interview is an
excellent opportunity to retrieve key information
about the candidate. As part of casual conversation
one can ask where the candidate is from, where they
grew up and where they did high school. I did not
cover it in this assessment but it is important to also
ascertain how senior the CFO is by asking who he
reports to and who reports to him. You may find
that the CFO is actually reporting into a Regional
CFO who in turn is reporting to a Group CFO, high
HIGH COLLEGE performance
which may leave your candidate lacking any real SCHOOL STUDENT EMPLOYEE
6 autonomy in his or her role. This is important
to note.
It is also interesting to note how many boards he Thus in High School it is interesting to note what was
or she sits on, which management committees the candidate’s favourite class and sport. Did they
he or she sits on etc, as your CFO should be take on early leadership roles such as Captain of the
comfortable managing heated debates with senior Basketball team or Best Boy?
stakeholders, board members and influential
members of the economy. The next part of Organizational Fit & Impact
questions provides insight into the individuals self
During this part of the assessment it is critical to awareness and self image. It is recommended
look for early expression of the candidate’s core to ask the candidate to describe themselves in
personality. As children we often play to our a personal manner, not a professional one. For
strengths, therefore kids with natural interpersonal example one could answer the question “describe
skills will gravitate to team sports and introverted yourself...” by saying, “I am a professional
deep thinkers will have a penchant for solo Executive Search Consultant with 10+ years of
activities. So the interviewer will gain insight into experience who enjoys building championship
You may find that the CFO is actually reporting to a
Regional CFO who in turn is reporting to a Group CFO,
which may leave your candidate lacking any real
autonomy in his or her role.
the candidate’s drivers, subconscious motivators leadership teams”, or from a personal perspective
and competencies by looking at the incumbent in “I am creative, deep thinker, loving father of two
early development. As a child did the candidate daughters, who enjoys rich personal relationships
enjoy group activities or did they prefer to play with my peers”. The traits the candidates use to
alone. The assessment should contrast professional
competencies with early development interests.

7. organizational fit
describe themselves verve and brio. They will demonstrate a
should be written down systematic approach to goal achievement
and then later in the interview and a penchant for success metrics, such
the candidate should be able to as vividly remembering where they
demonstrate this trait in their finished in school.
professional careers.
In contrast the underperformer will be void of
As children we often any vision, will have only a vague idea of their
performance in high school, and will have
play to our strengths, serendipitously ended up at some university or
therefore kids with natural into some job as they roll with the punches of
interpersonal skills will life.
gravitate to team sports and
While it is true that some people are late
introverted deep thinkers bloomers and we should be mindful of that,
will have a penchant for it is interesting to note a candidate’s early
solo activities. performance. The statistical probability of
7 For example the interviewer could then ask “at
someone being a top performer in high school,
a top performer in university, and then a top
the beginning of this meeting you mentioned you performer in their chosen profession is
were creative, can you give me an example of a quite high.
time you had an innovative idea which increased
revenue or reduced a cost?”. Doubling back during Success breeds confidence and self esteem,
the interview process creates checks and balances which is required by any leader of a sizeable
to ensure the candidate is speaking from the gut denomination. So we cannot say with absolute
and not just trying to give you the politically confidence that an individual will perform
correct answer. well in his or her profession because in early
development they were top performers, but
Furthermore it is important to understand how we can say the statistical probability that this
the candidate thinks about achieving goals. individual will continue to perform at above
Often the top performer will have adopted a average is higher than if they did not perform
personal vision early on in life. well in school. When the candidate answers
the questions below take note of not what they
In the least the top performer will describe goals are saying but how they are saying it. Do they
such as making the football team, or getting present the answer with confidence, with a sense
accepted to their favourite university with of direction and insight?
Doubling back during the interview process creates
checks and balances to ensure the candidate is speaking
from the gut and not just trying to give you the
politically correct answer.

8. organizational fit
Assessing fit is a rather sophisticated technique n
What is your strategy to achieve this vision?
and one could write a book about it. For the (Top performers will demonstrate a regimented
purposes of this assessment I believe this is and systematic approach to achieving their
enough to get you started and moving in the vision. They will have thought about what key
right direction. milestones must be realized in order for them
to achieve their vision. Underperformers in
Please see some suggested questions below. contrast will stammer to present a strategy as
they have never given it any serious thought.)
n Childhood – Where did you grow up? Was it
fun growing up there? What was your favorite n
What are your salary expectations in the short
game as a child? run? (This is an uncomfortable question for all
candidates and can sometimes be asked at the
n High School – favorite classes, sports, interests, end of the interview.)
grades? Leadership positions?
n
What are your salary expectations in the long
n
University – favorite classes, sports, interests, run? (Many top performers will have a clear
grades? Leadership positions? Student body vision of how much they should be earning
positions? in 10 years from now. They should be bench
marking themselves off their mentors and
8 n image – How would you describe yourself,
Self industry gurus.)
not professionally but who are you as a person?
Okay and professionally, now how would you n
Current Family status – married, kids, no kids?
describe yourself? What do you see as your
greatest value proposition? n
Community involvement / Non-vocational
leadership roles? (Is the candidate contributing
n
What is your personal vision? What is the to the community in which they live? A candidate
raison d’être (purpose) of the next ten years who is making an effort to give back can be more
of your life? (Top performers will often comfortable in the role of coach or mentor others
describe their vision and describe a systematic on the team; much more due diligence is required
approach to achieving it. They are so charged than this one question but you can start to build
up and excited about the direction they are a body of evidence for the candidate who is a
taking in life that they enjoy talking about it; natural mentor.) n
underperformers in contrast find this question
uncomfortable, they often stare off into
space and try and muster a personal vision on
the spot.)

9. leadership
“I suppose leadership at one
time meant muscles; but today
it means getting along with
people.” - MK Gandhi
D
riving a team to achieve In fact, a USA Today article published in 2008
goals in a competitive market revealed that one in every five CEOs running the
is one of the most challenging 1,187 public companies with a market CAP of over
tasks a senior executive can face. $2 billion or greater at the time, had previously come
Individuals who score high on from one of 20 companies. That is 20% of all CEOs
this section will have a clear idea of large cap publically traded firms come from one
what leadership is and specifically what values of 20 companies. The top leadership factories in
and traits the ideal leader should epitomize. As an the US at the time of the article were GE, IBM, and
organization can never outperform the capabilities McKinsey. In fact GE had created 26 CEOs of $2
of its leadership, the purpose of leadership should billion orgreater companies in 2008.
9 be to create more leaders.
As an organization becomes more ambitious
and develops, its hunger for leadership becomes
insatiable. Many US companies have such an
appetite for leadership talent that they have
become experts in developing leadership in house.
Virtual leadership factories have begun sprouting
up all over the country.
nx20
The purpose of leadership is to create more
leaders and CFOs who live by this philosophy
should be identified, attracted and retained by
companies who want to beat their markets. The
first step in assessing leadership capability is to
understand their philosophy around leadership
itself. The first question in this section, “What is
the purpose of leadership?” will allow you to see
the candidate’s leadership philosophy. Further
+
in the questionnaire is another question which
Bx20
asks “You cannot be promoted if you cannot be
replaced, discuss?”. The majority of executives
will fail to see how these two questions are linked
1 in every 5 CEOs, of publicly and thus a red flag mechanism can be created,
traded US companies with should the incumbent be trying to give you the
answers they think you want to hear.
$2 billion plus market
capitalization, come from 1 of The executive who truly believes the purpose
20 companies. of leadership is to produce more leaders will
invariably see the question “You cannot be

10. leadership
THE PRICE OF The very essence of
GREATNESS IS leadership is that
RESPONSIBILITY. you have to have
- WINSTON CHURCHILL vision. You can’t
blow an uncertain
trumpet.
- Theodore M. Hesburgh
will invariably see the question “You cannot be leaders in the world are capable of achieving this
promoted if you cannot be replaced, discuss?” benchmark.
as relating to succession planning and how
important it is to institutionalize succession Having a vision of what leadership is in an
planning into the organization. The growth of organization is only part of the equation, the
the organization depends on its ability to produce real question is can they actually lead a large and
a steady stream of competent and capable leaders; complex team? A top performing leader must
as is demonstrated by winning case studies such understand how to harness the power of a team.
as GE, IBM and McKinsey. They must be capable of aligning a group and will
be a key factor in mobilizing people to follow a
As the leadership assessment continues the new direction. Candidates who score high on the
successful candidate should demonstrate the teambuilding questions of the leadership section of
ability to embed the values of the idealized the assessment will have a clear idea of what kind
leader into the company. It should be grafted of infrastructure must be created to drive a team
onto the recruitment process, the succession from good to great. I will provide a base line for this
10 plan, the promotion plan, the compensation and
benefits plan; it should resonate throughout the
answer, however team building is fluid and no two
CXO executives approach it in the same way. Some
Where they will have issues is in creating ownership of the
goal with front line staff, creating mutual accountability
for the goal across business functions and acquiring and
retaining a team with a complimentary mix of skill sets.
organization. For example McKinsey has a very may stray from the formula I suggest, what is most
clear picture of what leadership should look like important is the extent to which they have invested
at their organization, they recruit against it, they in developing a framework for managing a large
promote against it, they reward people who echo and complex team; complimented by their proven
it. They live it. It is the job of the team leader ability to make a team deliver results.
to create this type of a culture and only the top
For starters when assessing an executive on teambuilding I look for the following;
Their ability to acquire and
Their ability to articulate retain a complimentary mix
a clearly defined goal for
the group.
1 4 of skill sets to allow people
to leverage strengths &
weaknesses.
Their ability to create a
2 5
Their ability to get the
clearly defined process to team to take ownership
achieving the goal. of the goal.
Their ability to create
Their ability to create clearly
defined success metrics,
milestones and a point of
3 6 mutual accountability
across functions
and organizational
arrival for the achievement
boundaries.
of the goal.

11. LEADERSHIP
While I do not have time to go into an Please see suggested questions below;
explanation of something as complex as
team dynamics in this white paper, I have n What is the purpose of leadership?
provided enough for you to get started. By
following these guidelines you will at least be n
What is your team building philosophy?
able to benchmark your CFO candidate’s team
building philosophy against the above list. n
What are the key elements of team building?
Describe 3 of the most important aspects
Often Chartered Accountants will be very of teambuilding? (Leveraging Strengths/
strong at creating a clearly defined goal, Weaknesses, Common Goal, Common
developing a common process or path Approach, Common Measure, being mutually
towards the achievement of the goal and accountable, creating ownership).
will have prudent success metrics in place.
11 Where they will have issues is in creating
ownership of the goal with front line staff,
n
How do you embed your team building
philosophy into the organization? How do you
creating mutual accountability for the goal embed this into your recruitment process, your
across business functions and acquiring and training & development, you career planning,
retaining a team with a complimentary mix of promotions, innovations, compensation &
skill sets. benefits?
Thus in summary candidates who score high n
What do you think of the phrase “You cannot
in this section will have a clear idea of what be promoted if you cannot be replaced?”
the purpose of leadership is, what leadership How do you embed this philosophy into your
should look like in the organization and have organization and even the role of the CEO?
a keen vision of what infrastructure they will
create to lead their team to success. n
Describe a time you were able to turn around
an underperforming team. How did you do it?
Finally they will be able to embed all of this
into every facet of the business in an effort n
What are the key attributes of a successful
to create an enduring organization whose culture? What are the attributes of a successful
culture will become a virtual leadership leader? How do you embed these values into
factory. It is a tall order and few candidates your organization?
will pass this section.
n
What actions and support, in your experience,
make a team function successfully? n

12. VISION & CREATING
SHAREHOLDER VALUE
we are limited, not by our
abilities, but by our vision
- khalil gibran
T
he raison d’être of the division of his or her company. Often one of the
CFO is to use his financial prowess primary reasons the top performing CFO has for
to create and capture value for the changing employers is that their current company’s
shareholders. This will require the operating platform is incapable of achieving the
savvy CFO to be a strategic visionary, CFO’s vision. If the top performing CFO feels
a team leader, and a creative another organization’s platform will be a catalyst to
business partner. their vision, that particular company becomes very
attractive. Understanding the executives personal
Thus the assessment starts by looking for examples of and professional vision become key elements of both
significant value creation. Divesting shared services the selection process and the attraction process.
12 such as a call center and outsourcing it at a discount
can provide a large upside for an organization. Right As part of their vision the CFO should develop and
sizing an organization, or acquiring a competing communicate a compelling finance agenda. They
business can deliver an impactful lift to a company’s should be able to clearly articulate the financial goals
value. Sophisticated decisions which require intense of the company in both a short and long term context.
financial strategy are at the heart of the CFOs job
description. These decisions cannot be relegated The three most important goals of the finance
to anyone else. Candidate’s who are not thinking department should be easily recalled by a leading
about value creation may be more focused on the day CFO. Creating a vision is only 10% of the job, 90%
to day running of the business and may not have a is getting the team to commit to the vision. A CFO
strategic role at all. who is creating a vision and driving change within
the finance function will be able to articulate his or
Vision was discussed in depth at the beginning of this her finance agenda with ease. As he or she struggles
paper and its importance cannot be underestimated. to get their team to take ownership of the vision they
The CFO should have a clear vision for the finance would have had to communicate it on a daily basis
in a litany of forms. Candidates who cannot recite
their vision for the finance department may not
be heavily involved in the 3 to 5 year business
planning process and most likely are not internal
change agents. Failure to recite a vision can be a
red flag that this individual is not a CFO and may
be a Controller with a CFOs title.
good business leaders create a vision,
articulate the vision, passionately
own the vision, and relentlessly drive
it into completion.
- JACK WElCH

13. VISION & CREATING
SHAREHOLDER VALUE
Below are a few questions suggested to test a n you give me an example of a time when
Can
candidate’s ability in Vision & Creating Shareholder you were able to successfully create and
Value; communicate a compelling financial agenda?
Why was it successful?
n you give me an example of your biggest
Can
impact as it relates to building shareholder n
What is your vision of the finance department
value? of the future?
n
Many people feel that current public n
Describe a time you had an innovative idea
company reporting practices actually destroy that increased efficiency or increased revenue?
shareholder value, discuss?
n
Describe a time you felt the vision of your
n
What is your vision for your current company was slightly off focus? Were you able
department? to influence your leadership team to change
directions?
n
How will the role of the CFO change over the
13 next 5 years? (wait for candidate to answer
and then ask) How are you adapting to these
n your mind who are the top 3 CFOs of this
In
region? (Candidates who are aware of other
changes and what critical course corrections will top performers in the market are developing a
your department have to make in order to stay vision for their own personal and professional
competitive in the near future? development)
n
Who is the visionary on your current CXO n
What makes a top CFO? n
team? Do you share their vision?

14. financial strategy
if you know the enemy and you know
yourself, you need not fear the result of
a hundred battles. if you know yourself
but not the enemy, for every victory
gained you will also suffer a defeat. if
you know neither the enemy nor yourself,
you will succumb in every battle. - sun tzu
F
or the purpose of this
white paper, strategy is defined as an
approach that delivers a sustained
competitive advantage either for a
company or an individual. Therefore
if the company’s vision is to be the
14 leading IT company by gross revenue or to be the
law firm with the highest billings per partner; the manager his or her vision could be to be the
strategy would then be how the IT company will number one Account Manager in the country, and
achieve the highest gross revenue in its industry his or her strategy may be to create distribution
or how the law firm will achieve the highest channels his competitors do not have access to.
billings per partner. In this instance an executive does not have to wait
until they are leading a large team to exercise
The strategy will describe an approach to their strategic skills. Continuous improvement
the fulfillment of the vision which delivers a and competitive strategies can be developed at all
sustained competitive edge. levels in the organization.
In essence life is about strategy and anyone who
is interested in being competitive should have
numerous examples of creating and executing
strategy. Candidates who complain that they
are not in a strategic role should be eliminated
immediately.
Strategy is omnipotent for the CFO as finance
threads every department and every area of the
business. Finance affects every employee in the
form of compensation and benefits which can
often be the largest piece of the P&L of a business.
A winning strategy can be developed by a CFO of In its more implicit form it is embedded in every
a billion dollar company or it can be created by an business activity as controls or can be as complex
entry level Account Manager. as sophisticated derivative hedging strategies
used to minimize the company’s risk exposure.
Strategy takes place in all areas of an executive’s
career and those executives who advance to Financial Strategy is the bedrock of any top
the top are the ones who are using winning performing CFO and a critical pillar of any
strategies. In the case of the entry level account competitive business.

15. financial strategy
As CFOs become more sophisticated they are able n
Have you ever successfully implemented the
to direct human behavior within the organization outsourcing of your organizations non-core
and seamlessly graft controls onto the over- business functions? What was the situation?
arching strategy of the business. How did you recognize the opportunity for
outsourcing was significant?
They are masters of generating consensus and
commitment to new ideas. A strategy which is
not successfully executed is a useless strategy as n you give me an example of a long term,
Can
the test of any good idea is in its execution. A 3 to 5 year, business planning effort you
leading CFO will know how to get their teams to championed?
accept and implement the master plan.
n What is your philosophy of strategic
Below are some suggested questions to test a CFOs development & business planning?
strategic acumen; • How often do you review your strategic plan?
• Do you include outsiders in your strategic
n
Have you ever had an idea which has allowed process?
your company to enjoy a sustained competitive • What are the key steps in a successful
15 advantage? strategic planning process?
• How do you get alignment across the Board,
n you give me an example of a project you
Can C-Suite, Business Units, Line Managers and
worked on in which you had to switch strategies Employees?
mid-project? What was the situation, how did
you recognize a change in strategy was needed, n
Why is it 90% of strategies fail to be
how did you implement the change? (Reducing
implemented? Why do only 10% of companies
foreign exchange exposure, changing a banking
successfully execute their strategies?
relationship, divesting or outsourcing an element
(Sophisticated candidates will state that this is
of the business, etc.)
due to a lack of ownership and internalization
n
What is the toughest thing about of the company strategy by its staff. Leading
implementing a new strategy? executives will institutionalize processes
to allow front line employees to influence
n you give me an example of time you were able
Can and help create strategy. They will create
to reduce working capital in your organization? infrastructure which allows the strategy to
What are three strategies for reducing accounts be fluid and ever changing as the market and
receivable? What are three strategies for reducing company evolve.)
inventory? What are three strategies for increasing
accounts payable? n
Describe the most exciting acquisition of your
career? Was it your idea? What was your
n
Your company has requested you to increase strategy of evaluating the acquisition target?
the Return on Assets. What are two
strategies to achieve this goal? Have you n your current/previous company’s strategy
Is
ever spearheaded such an initiative in your competitive? What changes would you make
professional career? to it to make it more competitive?
n
Describe a time you developed a strategy from
n your industry who has the most competitive
In
scratch? What was the situation, how did
strategy of all? How can you compete against
you implement the strategy and what was the
them? n
result?

16. CONTROLS
has the foresight to see where the gaps in the
system are as markets change direction. What is
critical to assess is the candidate’s creative problem
solving skills and their understanding of human
psychology.
Below are some suggested questions regarding
controls:
n you give me an example of a project you
Can
worked on that was suffering from control
problems, how did you pinpoint where the
problem was? How did you find the problem, how
did you fix it and what was the result?
O
n CFO often inherits a companywide
The
ne of the paramount
measurement system that is based on historical
functions of the CFO is to
needs, rather than the requirements of its
develop and nurture an effective current strategic direction. How do you prune
set of controls for the business. He out those measurements that are not resulting
or she will examine each process in behavior aligned with the strategic direction?
in the business that involves Can you give me an example of a time you were
financial transactions to see where there is a risk of able to step into a role and link performance
16 losing assets and then install controls to reduce the
company’s exposure to the identified risk.
measures to the strategy of the organization?
(Candidates with a commanding knowledge
of controls will gravitate to re-engineering
Controls also increase the quality of financial data legacy control systems when they take on a new
that is being relayed back to the CXO team, from CFO position, while CFOs with an elementary
which critical business decisions will be made. understanding of the subject matter will be gun
While every company will want to operate in a zero shy to change traditional control set ups. If a
risk environment, the catch is controls can be very company takes a drastic change in strategy, a
costly. A risk free operating platform is often too change should be echoed in its control systems)
expensive to be competitive, thus a certain level of
n
What was your most challenging assignment
risk is always present in the company and the savvy
as it relates to implementing reliable control
CFO knows exactly how much risk is acceptable.
systems?
Often clients will chose a CFO from the same
n
What is the toughest part about constructing
industry as after working for twenty years in reliable control systems?
a specific sector an executive develops a deep
understanding of the inherent risks in the business. n you give me an example of a project where
Can
The mature, seasoned CFO is able to leverage you were able to design new controls for new
controls to direct human behavior as required by systems from scratch? What was the situation,
the over-arching strategy. what did you do and what were the results?
This type of re-engineering requires the experienced n you give me an example of a time when
Can
hand of a master craftsman who is able to identify you were able to create a measurement and
legacy controls which are no longer needed and reward systems to channel behaviors into
correct areas?
thus a certain level of n you give me an example of a time you re-
Can
risk is always present engineered control systems to create value for your
company?
in the company and
the savvy CFO knows n
Describe a time you effectively removed a
exactly how much risk is control from the business with positive
acceptable. results? n

17. MITIGATING RISKS
only those who will risk
going too far can possibly
find out how far one can go.
- T.s. eliot
A
risk can be defined as In today’s environment most companies will have
any event that threatens the a Chief Risk Officer but even so the CFO should be
achievement of the businesses heavily involved in risk assessment in the business and
objectives as defined by its vision have a deep understanding of risk management.
and strategy. The Chief Financial
17 Officer must not only be aware of Suggested questions to assess a CFOs risk competency
are listed below:
all past risks to the business but should be proactively
seeking the probability that new unknown risk events
may occur. n
What is your risk philosophy?
Traditionally companies buttress their risk policies n you give me an example of a time you were
Can
with layers and layers of preventive actions aimed able to successfully identify and mitigate a
at dealing with risk events which have already significant risk for your company? (E.g. Loss of
occurred. The greatest risks are the ones which key business partner, Forex risk, system failures,
have not occurred yet and are completely unknown loss of brand image, investment losses, interest
at this moment. rate increases)
n
What are the three biggest risks to your
department?
n
Looking at our current business model what do
you think the most likely risks for the business
would be?
n
Describe a time when you successfully
institutionalized a risk monitoring process?
n
How do you define your organization’s risk
appetite?
n
Describe a time when you aligned your board
and stakeholders on the appropriate risk
appetite for the business?
n
Describe a time when you process
re-engineered your risk reporting function?
n
How do you define a company’s
risk threshold? n

18. REDUCING COST
there is one rule for
industrialist and that is:
make the best quality of
goods possible at the lowest
cost possible, paying the
highest wages possible.
- henry ford
I
ncreasing efficiency is the CFOs today must embrace technology and become
focus of any company which aims to be innovative agents of change. Questions focused
competitive. Technology has delivered the on a CFOs ability to deliver cost reductions and
biggest efficiency gains in recorded history increase efficiency are below:
18 and the CFO of tomorrow will have to be
tech savvy. Being up to date with the latest IT n
What is your philosophy of cost reduction and
approaches that can deliver value for a company is a increasing efficiency?
must.
n you give me a specific example of how
Can
Today organizations are doing more with less on you benchmarked your firm’s performance to
an epic level. Automating a process can reduce risk assess how efficiently it was performing? How
exposure, increase efficiency and reduce costs all did you identify where opportunity gaps were
at the same time. Today companies are delivering and how did you propose to bridge these gaps?
multi-billion dollar revenues with a fraction of the
staff and the cost than that of even 10 years ago. n you give me an example of how your
Can
knowledge of bottlenecks in the production
process affected your decision regarding capital
expenditures?
n
What is the industry average cost to earnings
ratio? How does your organization measure up
to industry norms?
n
Have you ever created a system or policy
which encourages efficiency improvements
throughout the organization? Across all
departments and divisions?
n you give me an example of a re-organization
Can
you have spearheaded? How did you recognize
that a re-organization was necessary? How did you
re-align staff? How did you align people processes
and strategy?
n
Describe a time you were able to significantly
reduce your company’s fixed costs? n

19. resource allocation
rule no. 1: never lose money.
rulE no. 2: never forget rule
no.1.
- warren buffet
I
nvesting retained earnings Below are suggested questions for this section:
effectively requires decision making
19 rigor of an expert CFO. Current growth
opportunities, future expansion
n
What is the most difficult decision you
have had to make as it relates to Capital
prospects, research & development, Expenditures?
upgrading current facilities, pension fund
investments, paying dividends to shareholders, n
Have you ever been in a situation where there
special projects, etc, the list of investment needs is was a disagreement with your Board about
never ending and the winning CFO knows how to which projects should get funding and which
strike a balance between current and future needs. shouldn’t?
As the gate keeper to the company’s annual budget n
What is your philosophy of investing excess
and guardian of its liquidity, the ability to expertly cash?
allocate financial resources is the touchstone of
financial acumen. n
Have you ever created a separate WACC for
each department? (Creating an internal capital
market.)
n
What are the three biggest mistakes a CFO
makes as it relates to Capital Expenditures?
n
Describe a time your investment allocation has
outstripped your growth rate? What was the
result? What did you do to course correct the
situation?
n
What is your investment philosophy? n

20. SUMMARY
In the many ways the Chief Financial Officer position is the least forgiving CXO position as a failure
to perform one’s duties effectively can result in imprisonment. The pressures of the position are
tremendous and only seasoned candidates who can handle the intense heat of the boardroom should
be entertained for the position. The role requires mature individuals with the gravitas to create impact
with senior stakeholders and the political acumen to manage the sophisticated undercurrents of a
global arena. All of this must be underpinned by the rock solid character of an executive who has the
courage of their convictions. I hope this white paper enables you to make a better selection of your
next CFO, as it is but a small glimpse into my craft and profession. I have created this for free as it is
my honor to contribute to your success moving forward. The bedrock of a prosperous society is strong
ethical business and ensuring you chose your CFO correctly is critical not just to your company but to
the community. Should you have any questions about my assessment please do not hesitate to contact
me as I will be delighted to hear from you.
Shane Phillips Consultants is a boutique executive Helping companies build championship leadership
search firm specializing in senior placements. The teams has been a tradition in the Phillips family for
firm finds its roots planted in the 1970s in Canada generations. From assisting Fortune 500 companies
where The Phillips Group was first founded. After acquire and retain top performing senior executives
the retirement of Carl A. Phillips the business was or advising leading Chief Executive Officers on
closed for a period of years only to developing their human capital,
be re-opened in Dubai. With two Shane has executed CXO assignments
generations of Executive Search all over the world. His passion for
experience, Shane Phillips Consultants helping people and companies develop
offers high touch bespoke service for leadership capability has driven him
clients looking to hire the best people. to engage the media, where he is
Services offered include Executive now the host of Dubai Eye’s career
Search, Executive Assessment, show “Eye On Careers” as well as a
Recruitment Process Out-sourcing, contributing writer to CEO Magazine
and Training & Development. and Global Citizen Magazine.
Shane holds an MBA from London
SHANE PHILLIPS BIOGRAPHY Business School and a B.A. in
Psychology from the University
Shane is currently the Managing of British Columbia. He is a Non
Director of a boutique Management Executive Board Member of Fortis
Consultancy in Dubai, United Arab Group Holdings and Chairman and
Emirates. The lion’s share of his Founder of Big Brothers Big Sisters
professional experience is in Executive UAE. A former Executive Board
Search with previous experience at leading firms Member of the Canadian Business Council, President
such as Korn Ferry International, Odgers Berndtson of the Club for Canadians and a volunteer with the
and most recently at Stanton Chase International Families with Special Needs, the United Way and
where he was MENA Regional Practice Leader for Young Achievers.
Financial Services.
shane phillips consultants
+971 50 940 7537 | shane@shanephillips.net | www.shanephillips.net